Is Lack of Employee Engagement Dragging Down Your Financial Performance?

January 23, 2016

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Employee engagement is one of those buzzwords that has become synonymous with productivity, loyalty, and an overall sense of belonging to an organization. Many experts talk about increasing engagement through more recognition, better communication, respect for the employee’s personal life and any perks that add happiness and satisfaction to an employee’s work day. However, engagement goes far deeper than these surface feelings, and its effects run far deeper than increased productivity and employee loyalty. In fact, it’s so important that the Harvard Business Review Analytic Services Report calls engagement a “top-three business priority.” The report found that 71 percent of business leaders attribute overall organizational success to increased employee engagement. Is your company losing profits because of lack of engagement? If so, how can you turn it around?


Does It Really Affect Financial Performance?


Employee engagement is more than just having a happy workforce that wants to stay with the company long-term. A survey of chief financial officers by Gartner concluded, “Organizations with high levels of employee engagement significantly outperform those without, and conversely, high levels of disengagement can adversely impact operating income, revenue, and shareholder value.” Researchers recommended that companies view employee engagement on the same level of importance as key business performance measurements, such as profitability and customer loyalty.


How much difference does it make? Gallup research puts the potential increase in profitability at 22 percent. Here’s an even more compelling figure: Companies with engaged employees saw 147 percent higher earnings per share than their competitors. Here’s why engagement makes such a difference.


Forbes defines employee engagement as “the emotional commitment the employee has to the organization and its goals.” While free lunches, team building events and awards are nice things and might contribute to employee happiness and satisfaction, they are not the same as engagement. An engaged employee understands his or her role in the success of the company. Understanding and appreciating how they personally contribute to company success is critical to increasing engagement. It affects so many factors that directly impact your bottom line, including:



  • Increased productivity
  • Decreased absenteeism
  • Greater opportunity for innovation
  • Quality improvement
  • Increased customer service
  • Effective internal communications

How to Get Them Engaged


intranet-software-employee-engagementIf you feel like your employees are disengaged, you’re not alone. Gallup research found that 70 percent of U.S. employees are not engaged at work. Here are five tips to get you started.



  • Get leadership to set an example. The New York Times reported that employees are 55 percent more engaged when leaders model the desired behavior. Company leaders must set the example and be viewed as accessible. Managers that are locked away behind closed doors are not approachable and will further distance employees.
  • Create transparency. Establish an environment where employees feel invested in the company by trusting them with sensitive information. It creates a team atmosphere where employees feel less like they are on the sidelines.
  • Reexamine the hiring process. Be sure HR managers look for behaviors and personality traits that fit the company culture. While education and skills are important, hard skills can be taught. Soft skills, the ones that give someone the ability to be engaged, often cannot.
  • Build trust. Trust employees to make decisions, where appropriate. Give them the freedom to have flexible schedules or work remotely, if possible. Employees that feel empowered are often more engaged.
  • Improve internal communication. Bad communication is usually at the root of the destruction of any relationship, including that of employee and employer. According to 7 Surprising Facts About Improved Internal Communications, better internal communications can lead to both increased engagement and profits.
  • Show appreciation. Acknowledgment and appreciation are desired by everyone, regardless of position or pay grade. Build trust and improve strained relationships with a simple “thanks.” Employees that feel their work is important and valued will work harder to keep contributing to the company’s success. In fact, the Harvard Business Review report mentioned at the outset found “recognition to high performers” to be the number one driver of employee engagement.

Is Intranet Software a Viable Tool?


Engagement strategies and plans are great, but companies need tangible tools to enact them. Today’s intranet has moved far beyond the document storehouses introduced years ago. Social intranet software connects employees, closes the communication gap and provides a platform for recognition and candid feedback. CMS Wire recently reported on a UK study that identified key enablers of engagement. Note one of their conclusions. “Social intranets provide a means by which each of these enablers can be embedded within an organization, making them essential tools with which to boost engagement and reap the rewards in increased productivity.” How does a social intranet accomplish that? Here are three ways.



  • Employees can easily identify how they personally make a difference, and how their role contributes to the success of the corporate mission.
  • High performers can instantly receive public recognition for their work.
  • The communication gap between employees, managers and executive leaders are closed. Frequent, transparent updates can easily be distributed via an executive blog, news feeds or other special forums.

intranet-softwareThink of your intranet as the conduit for internal communications. The emergence of cloud intranet solutions has made them easy and inexpensive to implement. No IT support is required. Security is optimal. Downtime is minimal, and your new intranet can be deployed in a relatively short period of time compared to traditional on-site solutions.


Your marketing and HR departments will love the features available through an efficiently designed intranet. From updating marketing materials to submitting performance reviews, their jobs will streamline and employee response time will decrease. Your sales team, “in-the-field” employees and other remote workers will have 24/7 access to important documents, marketing materials and communication tools. Employees across all departments and levels will feel more connected and part of the company’s mission.


How to Make Your Intranet Truly Engaging


Now that you see the benefits of an intranet, how can you ensure yours is engaging and not just a tool that sits in the cloud and never gets used? Our expectations are high when it comes to online content. We are used to an internet that provides truly engaging content. Your employees will expect the same of their intranet. Here are two ways to accomplish that.



  • Your content must be dynamic. Employees will stop checking in if they see the same, static content. Keep them coming back by updating your homepages with engaging content. Consider a weekly “message from the CEO.” Feature updates on progress toward shared goals. Add a photo link to a recent company event. Share industry news. Profile top “discussions” and encourage employees to join in.
  • Employees must perform “work” on the intranet. Think of your intranet as a business tool. To be a successful engagement tool, it must be a vital part of every day. It must help employees get their work done. To do this, it must be easy to navigate, have an efficient search function and it must be reliable. Make it the first place employees go to find a file, send a message or find out what’s going on in the office.

Key Takeaways


Your employees are your biggest asset. An efficient and productive staff is a powerful force. Recognize the importance of keeping them engaged. An engaged staff ultimately increases profits. It’s not just about lowering your turnover rate. Keeping employees engaged directly affects your ability to satisfy customers, provide a quality product and increase your opportunity for innovation. An effectively designed intranet has the capability to touch all engagement drivers.


Gain a competitive edge in your industry by engaging your employees through cloud intranet software. Sign up for a free demo of MyHub Intranet Software, which includes free site setup support.

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